Audit the Federal Reserve (HR 1207)

Ron Paul’s bill to audit the Federal Reserve continues to gain momentum. H.R. 1207 now has 33 co-sponsors (as of 3/19/2009)!

If you too would like to see Ben Bernanke squirm and finally discover what the Fed has been up to behind the scenes, call and write your representative and ask that they support the “Federal Reserve Transparency Act H.R. 1207″.

Capitol Switchboard: (202) 224-3121

Here’s a sample letter you can use:

Dear Representative,

Please co-sponsor and/or support H.R.1207, an effort to audit the Federal Reserve.

Recently, it has come to light that there is little to no accountability to the people on the part of the Federal Reserve. While the citizens of this country are required by law to give an accounting of every penny they come in contact with, the Federal Reserve has never been held to the same standard. During this time of extreme economic crisis, the people deserve an accounting of where our money is going.

Currently there are 11 co-sponsors for this legislation, and it is enjoying bi-partisan support. Your efforts in supporting this important legislation would go a long way in proving to your constituents that you not only hold the Federal Reserve to the same standard as you do your constituents, but it would also show that you believe in transparency. Anything less than support for this resolution suggests that you are in favor of secrecy and a lack of accountability to the people who pay the bills. We pay the tab; we have a right to know where our money is going.

Unlike recent bills that you voted in favor of that had hundreds of pages and just a few hours to read, this bill can be read in under 5 minutes. I encourage you to take the time to read it, and then move to support it.

Thank you in advance for your attention on this important legislation. I have every expectation that you will do right by your constituents and support this measure.

Sincerely,

Auditing the Fed is only the first step towards exposing this antiquated insider-run creature to the powerful forces of free-market competition. Once there are viable alternatives to the monopolistic fiat dollar, the Federal Reserve will have to become honest and transparent if it wants to remain in business.

Ron Paul introduced bill H.R. 1207 on February 26, 2009 with the following speech to Congress:

Madame Speaker,

I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.

Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.

Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed’s susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.

The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.

More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.

The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.

This is the bill itself, H.R. 1207:

111th Congress - 1st Session

H.R. 1207

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) IN GENERAL. - Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after “shall audit an agency” and inserting a period.

(b) AUDIT. - Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. -

“(1) IN GENERAL. - The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

“(2) REPORT -

“(A) REQUIRED. - A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

“(B) CONTENTS. - The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.

Sponsor

Rep. Ronald Paul [R-TX]

33 Cosponsors [as of 2009-03-19]

Rep Abercrombie, Neil [HI-1] - 2/26/2009
Rep Alexander, Rodney [LA-5] - 3/10/2009
Rep Bachmann, Michele [MN-6] - 2/26/2009
Rep Bartlett, Roscoe G. [MD-6] - 2/26/2009
Rep Blackburn, Marsha [TN-7] - 3/16/2009
Rep Broun, Paul C. [GA-10] - 2/26/2009
Rep Buchanan, Vern [FL-13] - 3/17/2009
Rep Burton, Dan [IN-5] - 2/26/2009
Rep Castle, Michael N. [DE] - 3/17/2009
Rep Chaffetz, Jason [UT-3] - 3/6/2009
Rep DeFazio, Peter A. [OR-4] - 3/9/2009
Rep Duncan, John J., Jr. [TN-2] - 3/6/2009
Rep Fleming, John [LA-4] - 3/18/2009
Rep Foxx, Virginia [NC-5] - 3/10/2009
Rep Garrett, Scott [NJ-5] - 3/5/2009
Rep Grayson, Alan [FL-8] - 3/11/2009
Rep Heller, Dean [NV-2] - 3/6/2009
Rep Jones, Walter B., Jr. [NC-3] - 2/26/2009
Rep Kagen, Steve [WI-8] - 2/26/2009
Rep Kingston, Jack [GA-1] - 3/6/2009
Rep Marchant, Kenny [TX-24] - 3/11/2009
Rep McClintock, Tom [CA-4] - 3/6/2009
Rep Petri, Thomas E. [WI-6] - 3/10/2009
Rep Poe, Ted [TX-2] - 2/26/2009
Rep Posey, Bill [FL-15] - 2/26/2009
Rep Price, Tom [GA-6] - 3/10/2009
Rep Rehberg, Denny [MT] - 2/26/2009
Rep Rohrabacher, Dana [CA-46] - 3/6/2009
Rep Stearns, Cliff [FL-6] - 3/6/2009
Rep Taylor, Gene [MS-4] - 3/6/2009
Rep Wamp, Zach [TN-3] - 3/16/2009
Rep Woolsey, Lynn C. [CA-6] - 2/26/2009
Rep Young, Don [AK] - 3/6/2009